ENRA Group Berhad Annual Report 2019

144 ENRA GROUP BERHAD ∞ Annual Report 2019 page Notes to the Financial Statement 31 March 2019 42. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d) (iv) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would fluctuate because of changes in foreign exchange rates. The Group is subject to foreign exchange fluctuations through the import and export of finished goods. The Group also has cash and bank balances, receivables, payables and borrowings denominated in foreign currencies. At the end of reporting period, the Group holds bank balance denominated in foreign currencies as disclosed in Note 16(e) to the financial statements. The Group is also exposed to foreign currency risk in respect of the overseas subsidiaries. Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity analysis of the Group and of the Company to a reasonably possible change in the US Dollar, British Pound, Euro and Singapore Dollar exchange rates against the Ringgit Malaysia (“RM”) respectively, with all variables held constant, 3% is the sensitivity rate used when reporting foreign currency risk exposures internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. Group Company 2019 RM’000 2018 RM’000 2019 RM’000 2018 RM’000 Profit/(Loss) after tax US Dollar/RM - strengthen by 3% (2018: 3%) 71 (110) - - - weaken by 3% (2018: 3%) (71) 110 - - British Pound/RM - strengthen by 3% (2018: 3%) (408) (199) 1,194 1,013 - weaken by 3% (2018: 3%) 408 199 (1,194) (1,013) Australian Dollar/ RM - strengthen by 3% (2018: 3%) (40) - - - - weaken by 3% (2018: 3%) 40 - - - Euro/RM - strengthen by 3% (2018: 3%) - (496) - - - weaken by 3% (2018: 3%) - 496 - - Singapore Dollar/ RM - strengthen by 3% (2018: 3%) 1 546 - - - weaken by 3% (2018: 3%) (1) (546) - -